Oue Real Estate Investment Trust · SGX:TS0U
Oue Real Estate Investment Trust — OUE Commercial REIT — FY2021 Earnings Presentation
39 slides from Oue Real Estate Investment Trust's earnings presentation, Feb 16, 2022
Slide 1: Financial Results for 2H and FY 2021
Financial Results for 2H and FY 2021 16 February 2022
Slide 2: Important Notice
Important Notice This presentation should be read in conjunction with the announcements released by OUE Commercial REIT (“OUE C-REIT”) on 16 February 2022 (in relation to its Interim Financial Information for the Six-Month Period and Financial Year Ended 31 December 2021). This presentation is for i
Slide 3: Agenda
Agenda ▪ Key Highlights ▪ Financial Summary & Capital Management ▪ Commercial Segment ▪ Hospitality Segment ▪ Looking Ahead ▪ Appendices
Slide 4: Key Highlights
Key Highlights ▪ FY 2021 amount to be distributed was 6.9% higher YoY at S$142.0 million ▪ FY 2021 DPU of 2.60 cents was 7.0% higher YoY Financial Performance ▪ Stable NAV per Unit of S$0.57 as at 31 December 2021 ▪ Committed occupancy of Singapore office properties was 91.2% with higher YoY average
Slide 5: Key Highlights
Key Highlights Re-branding of Mandarin Orchard Singapore Divestment of 50% interest in OUE Bayfront ▪ Relaunch as Hilton Singapore Orchard on 1 March 2022 ▪ Agreed value of S$1,267.5 million or S$3,170 per sq ft: ▪ New MICE facilities, revamped F&B offerings including fresh dining concept Osteria Mo
Slide 6: Sustainability Commitment
Sustainability Commitment ✓ Environmental targets relating to reductions in energy consumption, greenhouse gas emissions, water consumption and Stewarding the waste, as well as recycling rates compared to base year 2017 Environment ✓ Integrating the Taskforce on Climate-related Financial Disclosures
Slide 7: Financial Summary & Capital Management
Financial Summary & Capital Management
Slide 8: 2H 2021 Financial Performance
2H 2021 Financial Performance 2H 2021 2H 2020 YoY Change (S$m) (S$m) (%) Revenue 116.3 150.0 (22.4) Net Property Income 95.2 119.4 (20.3) Share of Joint Venture Results 9.2 - NM Amount Available for Distribution(1) 64.4 72.5 (11.2) Amount to be Distributed 74.8(2) 78.4(3) (4.5) Distribution per Unit
Slide 9: FY 2021 Financial Performance
FY 2021 Financial Performance FY 2021 FY 2020 YoY Change (S$m) (S$m) (%) Revenue 249.9 292.0 (14.4) Net Property Income 204.2 231.9 (11.9) Share of Joint Venture Results 13.2 - NM Amount Available for Distribution(1) 131.6 137.8 (4.5) Amount to be Distributed 142.0(2) 132.8(3) 6.9 Distribution per U
Slide 10: Distribution Details
Distribution Details Payment of distribution for period from 1 July 2021 to 31 December 2021 Distribution Period 1 July 2021 to 31 December 2021 1.37 cents per Unit comprising: i. Taxable income distribution of 0.88 cents per Unit Distribution Per Unit ii. Tax exempt income distribution of 0.22 cent
Slide 11: Valuation as at 31 December 2021
Valuation as at 31 December 2021 ▪ Property valuation declined to S$6,018.3 million as at 31 December 2021, due to the divestment of 50% interest in OUE Bayfront in March 2021. While valuations for the hotel and retail segments were lower YoY, this was mitigated by higher Singapore office valuations
Slide 12: Portfolio Composition
Portfolio Composition Mandarin Mandarin Gallery Gallery Hotel master lease Crowne Plaza 6.2% agreements provide Crowne Plaza 7.9% Changi Airport One Raffles minimum rent of Changi Airport One Raffles 9.0% Place S$67.5 million 8.0% Place 25.6% Retail 27.3% per annum(4) 14.1% Hospitality 27.1% Lippo P
Slide 13: Tenant Base and Portfolio Lease Expiry Profile
Tenant Base and Portfolio Lease Expiry Profile Others Maritime & Pharmaceuticals & 2.2% Logistics Healthcare Legal 2.7% 1.6% 2.9% Services 3.9% Hospitality (1) IT, Media & 26.7% Office Retail Hospitality Telecommunications 3.9% 25.8% Manufacturing & Distribution 4.0% Energy & Commodities 4.3% 13.3%
Slide 14: Top 10 Tenants
Top 10 Tenants Top 10 Tenants contribute 44.9% of Total Gross Rental Income(1) 18.4% 8.9% 5.4% 4.3% 2.3% 1.3% 1.3% 1.1% 1.0% 0.9% (2) OUE Limited OUE Airport (3) Deloitte & Luxury Bank of Virgin Active Professional Victoria's Allen & Overy Regus Hotel Pte. Ltd. Touche LLP Ventures America Singapore
Slide 15: Capital Management
Capital Management ▪ As at 31 December 2021, aggregate leverage was 38.7% with stable weighted average cost of debt of 3.2% p.a ▪ In October, obtained S$540 million maiden sustainability-linked loan for refinancing existing borrowings. Average term of debt lengthened to 3.0 years, with no more than
Slide 16: Commercial Segment
Commercial Segment
Slide 17: Commercial Segment Performance – 2H & FY 2021
Commercial Segment Performance – 2H & FY 2021 (S$ million) (S$ million) 29.0% 29.8% 18.8% 17.6% 224.5 116.2 182.4 171.1 89.0 82.6 140.9 62.4 Revenue Net Property Income Revenue Net Property Income 2H 2021 2H 2020 FY 2021 FY 2020 ▪ The lower YoY performance was mainly due to deconsolidation of OUE Ba
Slide 18: Office Segment Occupancy
Office Segment Occupancy Singapore ▪ OUE Bayfront’s committed office occupancy 99.3% as at 31 December 2021, ahead of Chart Title the wider market 100% 99.3% 95% 95.5% ▪ Committed office occupancy of One Raffles 90% 88.6% Place and OUE Downtown Office declined to 88.3% 85% 88.3% and 88.6% respective
Slide 19: Committed & Average Office Rents
Committed & Average Office Rents ▪ Rental reversions for Singapore office properties in 4Q 2021 ranged from -5.0% to 9.5%. For FY 2021, Singapore office rental reversions ranged from -4.1% to 3.6%. ▪ Singapore office rents continue to recover, which is expected to narrow the gap between expiring ren
Slide 20: Average Passing Rents
Average Passing Rents S$ psf/mth 11.75 11.85 11.43 11.60 11.98 12.25 12.31 12.44 12.45 12.49 ▪ Sustained YoY growth in average 10.58 10.40 10.26 10.28 9.92 9.45 9.68 9.92 9.99 10.06 10.03 9.98 passing rents for all Singapore 7.92 7.93 8.05 8.03 8.04 6.94 7.27 office properties due to positive Singap
Slide 21: Top 10 Tenants – Commercial Segment
Top 10 Tenants – Commercial Segment Top 10 Tenants contribute 26.6% of Commercial Segment Gross Rental Income(1) 7.4% 5.9% 3.2% 1.8% 1.8% 1.5% 1.4% 1.2% 1.2% 1.2% Deloitte & Luxury Bank of Virgin Active Professional Victoria's Allen & Overy Regus Aramco Asia Moody's Touche LLP Ventures America Merri
Slide 22: Lease Expiry Profile – Commercial Segment
Lease Expiry Profile – Commercial Segment 22.5% of OUE C-REIT’s commercial segment gross rental income is due for renewal in 2022 By NLA By Gross Rental Income 24.1% 22.5% 22.0% 22.4% 22.8% 21.5% 21.4% 20.5% 10.9% 10.7% 0.7% 0.5% 2021 (1) 2022 2023 2024 2025 2026 and beyond WALE(2) of 2.4 years by N
Slide 23: Lease Expiry Profile by Commercial Property
Lease Expiry Profile by Commercial Property OUE Bayfront One Raffles Place WALE: 2.5 years (NLA); 2.4 Years (GRI) WALE: 2.1 years (NLA); 2.1 Years (GRI) 26.4% 26.6% 22.3% 22.7% 28.8% 20.5% 20.0% 19.8% 26.1% 26.5% 20.1% 24.2% 21.2% 22.0% 14.5% 13.5% 10.4% 11.2% 10.9% 10.6% 0.8% 0.9% (1) 2022 2023 202
Slide 24: Mandarin Gallery
Mandarin Gallery Committed Occupancy ▪ While occupancy was impacted by dampened leasing 0.9% 1.8% 3.0% 5.3% 5.5% 6.5% 5.9% 7.6% sentiment, vacancy increase was also partly due to ongoing repositioning of certain spaces to F&B to 99.1% 98.3% 97.8% enhance tenant mix and strengthen appeal to shoppers
Slide 25: Hospitality Segment
Hospitality Segment
Slide 26: Hospitality Segment Performance – 2H & FY 2021
Hospitality Segment Performance – 2H & FY 2021 (S$ million) (S$ million) Flat 7.6% Flat 4.1% 67.5 67.5 63.3 60.8 33.8 33.8 32.7 30.4 Revenue Net Property Income Revenue Net Property Income 2H 2021 2H 2020 FY 2021 FY 2020 ▪ Hospitality segment revenue for 2H 2021 and FY 2021 of S$33.8 million and S$6
Slide 27: Hospitality Segment RevPAR Performance
Hospitality Segment RevPAR Performance 4Q 2021 vs 3Q 2021 FY 2021 vs FY 2020 (S$) (S$) 43.9% 13.0% 23.0% 16.4% 6.7% 2.5% 125 111 113 118 97 110 92 (1) 87 90 68 (1) 75 62 Mandarin Orchard Crowne Plaza Changi Hospitality Segment Mandarin Orchard Crowne Plaza Changi Hospitality Segment Singapore Airpor
Slide 28: Looking Ahead
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Slide 29: Outlook
Outlook ▪ Positive leasing momentum is expected to continue in 2022, supported by expansionary demand from the technology sector amidst limited supply pipeline Singapore Office ▪ As the Singapore office rental recovery continues, OUE C-REIT’s portfolio of high-quality Grade A office properties and d
Slide 30: Appendices
Appendices ▪ Overview of OUE C-REIT ▪ Premium Portfolio of Assets ▪ Singapore Office Market ▪ Shanghai Office Market ▪ Singapore Hospitality Market ▪ Hotel Master Lease Details
Slide 31: Overview of OUE C-REIT
Overview of OUE C-REIT One of the Largest Diversified Total Assets 7 7 High quality prime assets SGX-listed REITs S$ 5.8 billion(1) High quality prime assets 3 6 properties in Singapore and 1 Asset classes property in Shanghai OUE Bayfront One Raffles Place OUE Downtown Office Lippo Plaza Mandarin G
Slide 32: Premium Portfolio of Assets
Premium Portfolio of Assets Strategically-located assets in the prime business districts of Singapore and Shanghai OUE Downtown Mandarin Orchard Crowne Plaza OUE Bayfront One Raffles Place Lippo Plaza Mandarin Gallery Office Singapore Changi Airport Description A landmark Grade A Iconic integrated G
Slide 33: Singapore Office Market
Singapore Office Market ▪ Core CBD Grade A occupancy increased 1.0 ppt QoQ to 95.5% in 4Q 2021 due to a recovery in demand led by the technology and non-bank financial sectors. The healthy demand and limited supply drove a 1.4% QoQ increase in CBD Grade A office rents to S$10.80 psf per month ▪ Posi
Slide 34: Singapore Office Demand & Supply vs Office Rental
Singapore Office Demand & Supply vs Office Rental Island-wide Office Demand, Supply and Office Rents ('000 sq ft) (S$ psf/mth) 7,000 20 6,000 18 16 5,000 14 4,000 12 3,000 10 2,000 8 1,000 6 4 0 2 -1,000 0 -2,000 -2 -3,000 -4 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Slide 35: Shanghai Office Market
Shanghai Office Market Shanghai 10.3610.3510.35 100.0% 10.1 10.3 10.3 10.5 10.4 10.4 10.3 10.1510.2110.26 10.3210.27 10.20 10.10 11.0 ▪ Shanghai CBD Grade A office 96.0% 9.68 10.0 95.0% 95.0% 92.8% 9.28 9.09 9.00 8.88 8.94 8.99 9.02 9.0 occupancy increased 1.2 ppt QoQ to 90.0% 89.8% 89.4% 90.0% 88.4
Slide 36: Shanghai CBD Demand, Supply & Vacancy
Shanghai CBD Demand, Supply & Vacancy Grade A Office Net Absorption, New Supply and Vacancy Rate Office Supply Pipeline in Shanghai CBD '000 sq m 1,000 16.0% 600 527 900 14.0% 800 500 12.0% 700 10.0% 400 600 329 299 500 8.0% 300 400 6.0% 300 200 4.0% 200 80 100 49 100 2.0% - 0.0% - 2009 2010 2011 20
Slide 37: Singapore Hospitality Market
Singapore Hospitality Market ▪ For 2021, Singapore visitor arrivals remained well below pre-COVID levels. December visitor arrivals jumped almost fourfold YoY to 0.9 million due to Vaccinated Travel Lane arrangements with various countries, but this constituted only 5% of December 2019 arrivals ▪ In
Slide 38: Hotel Master Lease Details
Hotel Master Lease Details Property Mandarin Orchard Singapore Crowne Plaza Changi Airport No. of Guestrooms 1,077 563 Master Lease Variable Rent Comprising Sum of: Variable Rent Comprising Sum of: Rental (i) 33.0% of MOS GOR(1) ; and (i) 4% of Hotel F&B Revenues; (ii) 27.5% of MOS GOP(2); (ii) 33%
Slide 39: Thank You
COMMERCIAL Thank You